KUBER AUTO GENERAL FINANCE & LEASING LIMITED
Your Directors have pleasure in presenting the Fifth Annual Report on the
Business and operations of the company together with audited Accounts for
the year ended 31 st March 1998.
The last Financial year witnessed slow industrial growth, compounded by a
severe liquidity crunch,high cost of funds and sluggishness in the capital
market. ln this financial and economic scenario of the recent past, the
performance of the most NBFCs was adverselY affected.
The pervasive downward slide in Indian economy in general and NBFCs in
particular in the financial year 97-98 and prevailing market conditions
have a telling effect on the performance of the company. The poor results
are due to new regulatory framework brought out by the Reserve Bank of
India in the beginning of 1998. In a nut shell,the Reserve Bank of india
has introduced prudential norms, capital adequacy requirement, linking of
quantum d deposit mobilization with credit rating, stricter norms for
provisioning and income recognition etc.
Following the issue of these guidelines, your directors decided neither to
accept nor to renew existing deposits with effect from 2nd January,
1998. This has adversely affected the liquidity and profitability of your
company. Given the constraints under which your company has to operate, we
can conclude at performance of your company was satisfactory.
Your Directors have time and again approached the Reserve Bank of India to
get your company registered and classified as Hire Purchasing & Leasing
company. We expect that with the latest results as made available to you,
we are quite confident that our plea will be favourbly considered by the
Reserve Bank of India. We are also making efforts to get credit rating for
your company from an approved credit rating agency. Once we achieve these
twin obJectives,we will sail through the present disappointing phase and
expect to present a better picture next year.
During the year under review your company has also accepted/renewed
Deposits from the public and others up to 1 st January, 1998. Your
Directors are pleased to inform you that the Investors have reposed their
confidence in the company's ability of timely payment of interest and
repayment of principal.
With effect from 2nd January,98 the company has not accepted any deposits
In view of the changes affected through Non -Banking Financial Companies
(Reserve Bank of India) Directors,1998. There were no unclaimed deposits as
on 31st March, 1998. The total deposits outstanding as on 31st March, 98
were amounting to Rs.11.92 Crore. The Company has been complying with all
the directions of Reserve Bank of India as applicable to Hire Purchase &
Your company is determined to fulfill the expectations and retirements of
its clients and investors in the present business scenario by providing
them high level quality services and introduction of new financial
As you all know, the business scenario for Non Banking Finance Companies is
likely to be more competitive In the coming years, due to the entrance of
the Public Sector undertakings and Foreign Banks in the Business which was
hetherto traditionally dominated by the NBFCs The Union Budget 1998-99 has
also reaffirmed the hopes of the Corporate Sector about the present
Governments commitment of providing liberal incentives to the Indian
Industry hence we expect that the Indian Corporate sector comes out of the
morass it is presently in and will head for a bright and prosperous future.
To capitalise on each and every business opportunity, your company is
coming up with the new area of business. For this way it is launching its
consumer finance division. In order to broad base the operation of the
division, the Company intends to provide funds to i;s present and
prospective clients for Consumer Durables alongwith office equipments.
Mr. Mukesh Mohan Sharma, Director of the company retires by rotation at the
ensuing Annual General Meeting and being eligible, offers himself for
Mrs. Rowena Sharma,Director of the company retires by rotation at the
ensuing Annual general meeting and being eligible, offers herself for
During the year 1997-1998 the Authorized Capital of the company has been
reorganized from 15000000 equity shares of Rs.10/- each to 80,00,000
equity shares of Rs.10 each and 7,00,000 preference shares of Rs.100 each.
CONSERVATlON OF ENERGY, TECHNOLOGY ABSORPTlON
Particulars Under Companies (Disclosure of Particulars in the report of
Board of Directors) Rules, 1988 on Conservation of Energy, Technology
Absorption are not Applicable.
FOREIGN EXCHANGE EARNINGS AND OUTGO
There was no Foreign Exchange earning and outgo during the year under
M/s Alok Deepak &. Co., Chartered Accountants, retire at the fortheoming
Annual General Meeting and are eligible for reappointment. As required
Under Section 224 (1 B) of the Companies Act,1956 the company has obtained
confirmation to the effect that their reappointment, if made, would be in
conformity with the limits prescribed in the said section.
Regarding point no. 13 and 15 of the Auditor Report, your Directors would
like to mention that the company has alread/ applied to the Reserve Bank of
India for registration and classification- of your company as an Equipment
Leasing & Hire Purchase company. Apart from this the management is making
concerted efforts to Strengthen the Internal Audit System.
INFORMATION REGARDING NON-BANKING FINANCIAL COMPANIES (RESERVE BANK OF
INDIA) DIRECTION 1977
1.Total number of depositors of the company who's deposits have not been
claimed by them. Nil
2. Total number of depositors who have not been paid by the company, after
the date on which the deposits became due:- Nil
3. Total amount due to be deposited and remaining unclaimed or unpaid
after the due date:- Nil
DISCLOSURE UNDER THE LISTING AGREEMENT
A. CLAUSE 43: Report with regard to the projected utility and
profitability, pursuant to clause 43 of the Listing agreement with the
Stock exchange (s) as under:
a. Utilisation of Funds
The company had mobilised Rs.4,50,00,000 from the public issue of 4,00,000
equity shares, of Rs.101- each for cash at par in January 1995. The
proceeds of the the Public issue have been fully Utilised for purposes as
disclosed in the prospectus.
b. Projections V/s Actuals
(Rs. in Lakhs)
Total Turnover 1527.89 1587.61
Profit(Loss) After Tax 220.09 (13.77)
Equity Share Capital 700.00 700.53
Reserves 247.55 58.27
The difference between the projections and Actuals are due to the depressed
financial market conditions, and new regulatory framework brought out by
the Reserve Bank of India in the beginning of 1998 which has compelled the
company to defer its disbursement plans.
B. Clause 32: Cash flow statement pursuant to clause 32 of the Listing
agreement is provided alongwith the Notes to Accounts.
Your Directors place on record their appreciation for the valuable
contribution made by all the employees and agents of the company.
For and on behalf of the Board
for KUBER'AUTO GENERAL FINANCE & LEASING LIMITED
Place: New Delhi PRADYUMAN KUMAR SHARMA ROWENA SHARMA
Date: 8.07.1998 (Managing Director) (Director)